Fair Use Or Free Riding? The AP’s New Attack On News Scraping

The Associated Press is becoming more aggressive in trying to rein in the information the news service scatters around the world. After helping to launch a copyright monitoring service, the AP is now suing a company that clips headlines and news items for its customers.

In a complaint filed this morning in New York federal court, the AP accused Norway-based Meltwater of wrongfully repackaging and sharing its content without a license.

The lawsuit comes at a time when content owners continue to wrestle with how to stop what they perceive as free riding by news monitors and aggregators.

The problem for news providers is that facts and headlines can’t be copyrighted. In response, the providers have been trying to resurrect a doctrine known as “hot news” that the AP itself helped to create nearly a century ago.

The rule was born in 1918 when the Supreme Court agreed to grant AP a property right in its news in order to force William Randolph Hearst’s newspapers to stop rewriting the AP’s war accounts from Europe. Hearst’s aggressive tactics included cabling stories to reporters on the west coast — this meant that California competitors would sometimes scoop the AP on its own stories.

But despite the ruling, the hot news rule lay dormant for most of the 20th century. It only sprang back to life in 2010 when a New York judge agreed to forbid a financial aggregator called Fly-On-The-Wall from reporting on investment banks’ newsletters.

The reborn rule soon suffered a setback, however, when an appeals court overturned the Fly-On-The-Wall decision and created complicated hurdles that a publisher must overcome before they can claim to own hot news. So far, no company has met these hurdles.

According to lawyer Elizabeth McNamara, who is representing AP, the Meltwater situation is a case where hot news should be applied. She points out that the clipping service is in direct competition with AP and has poached clients such as Homeland Security.

McNamara adds that AP’s hot news claim is strengthened by the fact that Meltwater also offers archives and a ‘build your own newspaper’ service to its clients based on others’ news reports. If Meltwater is indeed in direct competition with the AP, it may have more success than claimants like NBA who once tried to use the “hot news” rule to stop a company from sending basketball scores to the pagers of fans.

In its lawsuit, the AP is also claiming copyright infringement on the grounds that Meltwater has copied and stored the articles, and that it is sharing “the heart” of the articles by reproducing more than 30% of them.

Meltwater, the clipping service, has been on the defensive in other countries, including the UK, where courts have said it must obtain a license both to use content and a second one for its clients to share that content. Also today, Meltwater obtained a minor victory of its own when the UK Copyright Tribunal agreed to lower the licensing rates.

In its complaint (embedded below), the AP seeks an injunction, damages and an order that Meltwater destroy all AP stories in its database. The AP is likely using the demands as leverage to force Meltwater into obtaining a license similar to ones it grants to Google (NSDQ: GOOG) News and other services.

These type of revenue streams have become increasingly important to AP after a number of its newspaper clients balked at high prices and quit the service.

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